Have we been unfair to FDR?

Added: 2026-05-25

[00:00:00]So, last time we talked about FDR's actions in 1933 as he was elected at the beginning of the Great Depression.

[00:00:08]Some of you made comments about his confiscation of the private gold stock.

[00:00:12]We did agree with one of you that we considered it theft, especially as he devalued the savings of Americans after he collected the gold in exchange for cash. I'm just going to read from my draft manuscript now. President Roosevelt issued an executive order requiring citizens to surrender private gold stock over $100 in value under threat of fines or jail.

[00:00:35]Approximately 300 million in gold coins and 470 million in gold certificates were surrendered by mid-1933, adding an estimated 15 to 20% to Treasury gold reserves, enabling expansion of the money supply.

[00:00:51]Buying gold cheap, then selling high, it boosted exports, reduced interest rates, and enabled New Deal spending. I already had a negative impression of FDR from this book written years ago, The Forgotten Man by Amity Shlaes. She analyzes the and reviews what it was like during the Great Depression and the policies of FDR and how counterproductive they were. So, researching for this book with my impressions already kind of set, but as you're researching, you discover things that change the way you view. So, this is a paper I uncovered.

[00:01:29]It was published in 1997 out of MIT, The Gold Standard and The Great Depression by Eichengreen and Temin.

[00:01:37]These guys make the argument that adherence to gold standard orthodoxy prolonged the recession by not expanding the money supply.

[00:01:46]15 to 15 and 1/2 million men were out of work, roughly 25% of the working population in 1934 on average. And as I read this paper, I started to sympathize just a little bit with FDR. I mean, it didn't change essentially my views, but it added some nuance. I've written the question I'm going to ask you now. Was FDR wrong to take this action to foster inflation, hence boosting the economy?

[00:02:13]Or was it the way his executive order confiscated the private gold stock of US citizens before reducing the value of their savings by 41%. After all, at the prevailing price, citizens were allowed to keep 5 oz worth of gold, an amount that I'm sure many of us would be happy to own today. Okay, some more color to the whole issue.

[00:02:35]So, I'm going to put my email in the description of this video.

[00:02:41]If you're interested, send me your email. I'm not going to spam you, but I will provide a PDF if you're interested.

[00:02:48]It's readable, it's 25 pages, it's not too geeky or technical, but it helped me see FDR in a new light. Okay? Until next time.